Cardless financial transactions system

ABSTRACT

Users are enabled to conduct financial transactions in a secured manner without the need to use traditional financial instruments, such as credit cards, debit cards, prepaid cards, ATM cards, checks, cash, etc. In addition, user&#39;s identity is kept confidential in the financial transactions.

CROSS REFERENCE TO RELATED APPLICATION

This application claims the benefit of U.S. Provisional Application No.61/211,335, filed on Mar. 30, 2009, the disclosure of which is expresslyincorporated by reference herein in its entirety.

TECHNICAL FIELD

The present disclosure relates generally to financial transactionssystem. More specifically, the present disclosure relates to conductingfinancial transactions without using any traditional financialinstrument such as a credit card, debit card, ATM card, gift card,stored value card, prepaid card, cash, check, etc.

BACKGROUND

The traditional payment cards such as credit cards, debit cards, ATMcards, stored-value cards, gift cards, prepaid cards, etc. can be easilystolen and fabricated. For example, by bribing a waiter in a restaurant,a fraudster can easily steal the card information from a guest of therestaurant. The fraudster can use the stolen card information to pay anominal fee to numerous background search websites on the Internet tofind useful personal information based on the cardholder's name shown onthe stolen card. A counterfeit card and a counterfeit identificationdocument, such as a driver's license, can be easily fabricated withpresent technology.

Once a fraudster has stolen or fabricated such card, the fraudster canquickly conduct many illegal financial transactions before the affectedfinancial institutions, organizations or individuals identify the fraudand disable the card. Many individuals, organizations and financialinstitutions have already suffered tremendous material loss and damagesas a result of fraud in financial transactions.

In fact, stealing financial instruments can be easily committed today.Many financial institutions and merchants have kept the personalinformation including the information of the financial instruments suchas credit cards, debit cards, etc. of their clients in their databases.It has become common for employees of financial institutions, merchants,or consumer report companies to steal customers' information, commitfraud, and/or sell the information to fraudsters.

In addition to credit cards, debit cards, etc., checks are still one ofthe most popular financial instruments today. It is easier to fabricatea counterfeit check than to fabricate a counterfeit card. There arenumerous cases related to counterfeit checks which are used togetherwith counterfeit identification documents.

Furthermore, an online merchant cannot easily tell whether a remoteconsumer has the correct identity. If correct card information, whichcan be obtained from a stolen card, and the correct billing address,which can be obtained from Internet search websites, are presented, themerchant cannot easily tell whether the remote consumer is actually afraudster. An experienced fraudster can easily conduct fraudulent onlinetransactions. As a result, online merchants lose a tremendous amount ofmoney every year.

Furthermore, mailing new financial instruments to new customers orexisting customers when their old financial instruments expire is amajor overhead to financial institutions. In addition to the huge amountof resources used in this mailing process, these financial instrumentscan be easily stolen during the mailing process and susceptible tofraud.

In addition to the examples given above, fraud can be easily committedin the computer age because a user is often identified by a user IDand/or Personal Identification Number (“PIN”) and a password. Once afraudster has stolen the user ID and/or PIN and password of anotherperson, that fraudster can conduct many criminal activities throughaccess to this account. Therefore, fraud is a major threat to onlinebanking, online trading, e-commerce, and many other computer relatedactivities.

In summary, financial transactions fraud can be easily committed today,and individuals, organizations, merchants and financial institutions aresuffering enormous losses and damages. There is a need for a betterfinancial transactions system.

SUMMARY OF THE DISCLOSURE

The present disclosure enables consumers to conduct financialtransactions in a secured manner without the need to use any traditionalfinancial instrument which can be easily stolen or fabricated.

As a result of the present disclosure, there is no need for consumers tocarry traditional financial instruments such as checks, credit cards,debit cards, stored-value cards, pre-paid cards, ATM cards, gift cards,etc.

Traditionally, a client of a financial institution is identified by anaccount number. For example, a credit card has a credit card accountnumber. A check has a checking account number. A stock trading accounthas a trading account number. An insurance policy holder has a policynumber (or an account number). This is the traditional way for financialinstitutions to identify and manage billions of clients without anyconfusion.

Since an account number is very long and a client may not be able toremember it, it is customary for a financial institution to issue afinancial instrument which contains the account number. Therefore, ithas been the convention that financial transactions are conductedthrough cards.

However, if the financial instrument information of a consumer isstolen, a fraudster can use the stolen information to fabricatecounterfeit financial instruments such as credit cards, debit cards, orchecks, etc. or to give fraudulent instructions. Therefore, protectingthe financial instruments has been essential to preventing financialtransactions fraud.

Many methods have been disclosed throughout history to protect financialinstruments. For example, some methods suggest financial institutions toprovide consumers with temporary card numbers which will automaticallyexpire when certain criteria are met. Some methods suggest thatcardholders should deactivate their card numbers while they are notusing the cards and activate their card numbers again before they usetheir cards. In general, these methods create huge overhead to financialinstitutions and consumers.

The present disclosure intends to reduce or eliminate the dependence onthe traditional financial instruments such as checks, credit cards,debit cards, ATM cards, pre-paid cards, stored value cards, gift cards,monetary instruments, wire transfers, etc. so that there is nothing forfraudsters to steal.

In one embodiment of the present disclosure, a computer system toconduct financial transactions without using traditional financialinstruments includes a computer processor and a memory device coupled toa network and a database stored on the memory device adapted to storeassociated with a user's account at least two sets of data and contactinformation of a personal communication device of the user. The firstset of data consists of a part of the user's personal identificationinformation which the user knows well without any special effort tomemorize. The second set of data is a short data string which the usercan memorize with minimum effort. The second set of data ensures theuniqueness of the combination of the first set of data and the secondset of data in the database.

The computer system uses a communication module to send a new pass codein substantially real-time to the user's personal communication devicein response to receiving the first set of data and the second set ofdata from a subject and the user's account complying with a pre-definedcondition. The pass code has a pre-defined life time. In addition, thecomputer system uses a transaction processing module which permits thesubject to conduct at least one transaction in response to receiving thepass code from the subject before the pass code expires.

In another embodiment of the present disclosure, a computer system toconduct financial transactions without using traditional financialinstruments includes a computer processor and a memory device coupled toa network and a database stored on the memory device adapted to storeassociated with a user's account at least the identification documentinformation of a government-issued official identification document ofthe user and contact information of a personal communication device ofthe user.

The computer system uses a communication module to send a new pass codein substantially real-time to the user's personal communication devicein response to receiving the identification document information whichis provided by a subject and read by a device interface and the user'saccount complying with a pre-defined condition. The pass code has apre-defined life time. In addition, the computer system uses atransaction processing module which permits the subject to conduct atleast one transaction in response to receiving the pass code from thesubject before the pass code expires.

In an alternative embodiment of the present disclosure, a computersystem to conduct financial transactions without using traditionalfinancial instruments includes a computer processor and a memory devicecoupled to a network and a database stored on the memory device adaptedto store associated with a user's account at least accountidentification information and contact information of a personalcommunication device of the user.

The computer system uses a communication module to send the user'saccount identification information to the user's personal communicationdevice. The communication module sends a new pass code in substantiallyreal-time to the user's personal communication device in response toreceiving the account identification information read by a deviceinterface from a personal communication device provided by a subject andthe user's account complying with a pre-defined condition. The deviceinterface is connected to the computer through a network. The pass codehas a pre-defined life time. In addition, the computer system uses atransaction processing module which permits the subject to conduct atleast one transaction in response to receiving the pass code from thesubject before the pass code expires.

Furthermore, in one embodiment of the present disclosure, a computerizedmethod to protect login security includes (1) storing associated with auser's account at least account identification information and contactinformation of a personal communication device of the user; (2) sendinga new pass code in substantially real-time to the user's personalcommunication device in response to receiving the account identificationinformation entered by a subject with an attempt to login when the passcode has been given a pre-defined life time; and (3) permitting thesubject to login in response to receiving the pass code from the subjectbefore the pass code expires.

Moreover, in one embodiment of the present disclosure, a computerizedmethod to open a financial account for a remote subject includes (1)receiving personal identification information from the subject. Thepersonal identification information is read by a device interface from agovernment-issued official identification document; (2) receivingbiometric information from the subject. The biometric information isread by the device interface from the subject; and (3) opening theaccount based on the subject's identification information when thebiometric information read from the subject corresponds to the personalidentification information read from the official identificationdocument and the subject is not on a blacklist.

In this disclosure, the terminology “network” or “networks” generallyrefers to a communication network or networks, which can be wireless orwired, private or public, real time or non-real time, or a combinationof them, and includes the well-known Internet.

In this disclosure, the terminology “computer” or “computer system”generally refers to either one computer or a group of computers, whichmay work alone or work together to reach the purposes of the system.

In this disclosure, the terminology “processor” generally refers toeither one processor or a group of processors, which may work alone orwork together to accomplish the purposes of the computer system.

In this disclosure, a “bank” or “financial institution” generally refersto a financial service provider, either a bank or a non-bank, wherefinancial services are provided.

In this disclosure, a “bank account” or “financial account” generallyrefers to an account associated with a financial institution, either abank or a non-bank, where financial transactions can be conductedthrough financial instruments such as cash, checks, credit cards, debitcards, ATM cards, stored value cards, gift cards, pre-paid cards, wires,monetary instruments, letters of credit, notes, securities, commercialpapers, commodities, precious metal, electronic fund transfers,automatic clearing house, etc.

In this disclosure, “financial transactions” generally refer totransactions related to financial activities, including but not limitedto payment, fund transfer, money services, payroll, invoicing, trading,escrow, insurance, underwriting, merger, acquisition, account opening,account dosing, etc.

In this disclosure, “trading” generally refers to trading activities,both private and public, including but not limited to trading of stock,currency, commodities, rights, values, securities, derivatives, goods,services, merchandise, etc.

In this disclosure, “securities” are generally referred to according tothe definition in the Securities Act of 1933. For example, securitiesmay generally include note, stock certificate, bond, debenture, check,draft, warrant, traveler's check, letter of credit, warehouse receipt,negotiable bill of lading, evidence of indebtedness, certificate ofinterest or participation in any profit-sharing agreement,collateral-trust certificate, preorganization certificate orsubscription, transferable share, investment contract, voting-trustcertificate; valid or blank motor vehicle title; certificate of interestin property, tangible or intangible; instrument or document or writingevidencing ownership of goods, wares, and merchandise, or transferringor assigning any right, title, or interest in or to goods, wares, andmerchandise; or, in general, any instrument commonly known as a“security”, or any certificate of interest or participation in,temporary or interim certificate for, receipt for, warrant, or right tosubscribe to or purchase any of the foregoing.

In this disclosure, a “consumer” generally refers to a customer, person,subject, subject person, payer, user, or client, etc., seeking toperform a transaction with an individual, an organization, a merchant,and/or a financial institution.

In this document, the terminology “official identification document”generally refers to a passport, driver's license, voter card, benefitscard, student identification card, social security card, nationalidentification card, identity card, certificate of legal status, andother official documents and information bearing instruments thatidentify a designated individual by certain verifiable characteristics,that are issued or certified by a consulate, embassy, government agency,or other governmental authorities, and that are protected againstunauthorized copying or alteration by the responsible government. Inparticular, such “official identification documents” can be formed fromvarious materials, including paper, plastic, polycarbonate, PVC, ABS,PET, Teslin, composites, etc. and can embed the identificationinformation in various formats, including printed or embossed on thedocument (or card), written on a magnetic medium, programmed into anelectronic device, stored in a memory, and combinations thereof. The“identification information” may include, but is not necessarily limitedto, names, identification numbers, date of birth, signatures, addresses,passwords, phone numbers, email addresses, personal identificationnumbers, tax identification numbers, national identification numbers,countries that issue the IDs, states that issue the IDs, ID expirationdate, photographs, fingerprints, iris scans, physical descriptions, andother biometric information. The embedded information can be readthrough optical, acoustic, electronic, magnetic, electromagnetic andother media.

In this disclosure, “personal identification information” generallyrefers to name, address, date of birth, personal identification number,user ID, password, tax identification number, type of the identificationdocument used, identity number associated with the identificationdocument, country, state, government organization and/or a privateorganization issuing the identification document, expiration date of theidentification document, phone number, screen name, e-mail address,photographs, fingerprints, iris scans, physical descriptions, and otherbiometrical information.

In this disclosure, “personal information” includes at least personalidentification information, personal relationships, personal status,personal background, personal interests, and personal financialinformation including information related to financial instruments,financial accounts and financial activities.

In this disclosure, “financial instruments” generally refer toinstruments which are used to conduct financial transactions. Examplesof financial instruments include cash, credit cards, debit cards, ATMcards, prepaid cards, stored value cards, gift cards, checks, monetaryinstruments, wire transfers, letters of credit, notes, securities,commercial papers, commodities, gold, silver, etc.

In this disclosure, a “personal communication device” generally refersto a device interface used for personal communication purposes.

In this disclosure, a “device interface” generally refers to a keyboard,a keypad, a monitor, a display, a terminal, a computer, a control panel,a vehicle dash board, a network interface, a machinery interface, avideo interface, an audio interface, an electrical interface, anelectronic interface, a magnetic interface, an electromagnetic interfaceincluding electromagnetic wave interface, an optical interface, a lightinterface, an acoustic interface, a video interface, an audio interface,a contactless interface, a mobile phone interface, a smartphoneinterface, a smartbook interface, other communication device interface,a Personal Digital Assistant (PDA) interface, a handheld deviceinterface, a portable device interface, a wireless interface, a wiredinterface, and other interfaces.

In this document, the terminology “terminal” or “kiosk” generally refersto equipment, including a computer and/or its peripherals,microprocessor and/or its peripherals, ATM terminal, check-cashingkiosk, money services kiosk, merchant checkout stand, cash register,coin exchange machine, parking lot payment kiosk, other payment kiosks,contactless device, wire line phone, mobile phone, smartphone,smartbook, personal communication device, PDA, digital assistant,entertainment device, network interface device, router, and/or PersonalDigital Assistant (PDA), etc., which interfaces a user with a computernetwork, so that the user may interact with computer systems and otherequipment connected to the computer network.

For a further understanding of the nature and advantages of thedisclosure, reference should be made to the following description takenin conjunction with the accompanying drawings.

BRIEF DESCRIPTION OF THE FIGURES

FIG. 1 illustrates a system and network diagram of a Cardless FinancialTransactions System (“CFTS”) to enable consumers, financial institutionsand merchants to conduct secured financial transactions.

FIG. 2 is a flowchart of an example process, indicating how a consumerregisters with the computer system of CFTS as shown in FIG. 1.

FIG. 3A and FIG. 3B are flowcharts of an example process, indicating howthe system shown in FIG. 1 enables a consumer to conduct securedfinancial transaction with a retail store at point of sale or with aremote merchant through a phone call.

FIG. 4A and FIG. 4B are flowcharts of an example process, indicating howthe system shown in FIG. 1 enables a consumer to conduct securedfinancial transactions with a retail store through an automatic checkoutstand or with an online merchant through a computer user interface.These flowcharts also show how a consumer can conduct financialtransactions through an ATM, kiosk, or other types of device interface.

FIG. 5A and FIG. 5B are flowcharts of an example process, indicating howthe system shown in FIG. 1 enables a consumer to conduct securedfinancial transaction with a retail store through his/her personalcommunication device such as a mobile phone.

FIG. 6 is a flow chart of an example process, indicating how the systemshown in FIG. 1 can ensure that a perpetrator cannot log into the systemeven if the perpetrator has stolen the correct user ID and/or PIN, andpassword.

FIG. 7A and FIG. 7B are flowcharts of an example process, indicating howthe system shown in FIG. 1 enables a consumer to conduct securedfinancial transactions with a retail store through his/her officialidentification document such as a driver's license. These flowchartsalso show how a consumer can conduct financial transactions through anATM, kiosk, or other types of device interface.

DETAILED DESCRIPTION

Because financial instruments such as credit cards, etc. can be easilystolen or fabricated, one of the primary goals of the present disclosureis to eliminate the use of the traditional financial instruments. Thetraditional financial instruments provide an important function oflinking a consumer to his/her accounts in financial institutions.Therefore, this linking function has to be provided in a differentapproach if the traditional financial instruments are eliminated.

In one embodiment of the present disclosure, a consumer can use his/herofficial identification document to link the consumer to his/herfinancial account.

In another embodiment of the present disclosure, a consumer's accountidentification information is sent to a personal communication device ofthe consumer, e.g., smartphone, etc. Such account identificationinformation can be transformed into a graphical pattern, e.g., a barcode, which can be displayed on the personal communication device foreasy scanning by optical devices. This graphical pattern will link theconsumer to his/her financial account. In addition, a consumer canrequest a change to new account identification from time to time and anew graphical pattern will be sent to the user to make it difficult forfraudster to steal the graphical pattern of the user.

In an alternative embodiment of the present disclosure, the consumer'saccount identification information can be sent to a personalcommunication device of the consumer and such account identificationinformation can be transformed into acoustic, electronic,electro-magnetic or magnetic signals so that the account identificationinformation of the consumer can be easily read by a device interface. Inaddition, a consumer can request a change to new account identificationfrom time to time to make it difficult for a fraudster to steal theaccount identification information of the consumer.

Since the new account identification information can be instantly sentto the personal communication device of the consumer, there is no needto worry about shipping, handling and associated fraud which would occurif a traditional financial instrument were used.

Furthermore, in one embodiment of the present disclosure, a password orpass code can be used to protect the personal communication device sothat a fraudster who has stolen a consumer's personal communicationdevice cannot use that personal communication device without the correctpassword or pass code.

In yet another alternative embodiment of the present disclosure, aconsumer remembers a number (including an alpha-numerical number) or adata string which can be linked to his/her account. In addition, eachconsumer can change this number or data string from time to time to makeit difficult for a fraudster to know or use this number or data string.

There are about six billion persons on earth and each one must beuniquely identified to avoid confusion in financial transactions. Inaddition, each financial institution has to be uniquely identified. Thatis the reason why a credit card number or a debit card number usuallyhas a length of about 15 to 20 digits.

To many people, it is difficult to remember a number of 15 digits to 20digits or a data string of equivalent length. In fact, most people onlyfeel comfortable to remember a number up to six or seven digits. On theother hand, a number of six or seven digits can only uniquely identify 1million or 10 million accounts and is insufficient to cover the entirepopulation on earth for account identification purposes.

Furthermore, the official identification document, the accountidentification information and the consumer-memorized number or datastring aforementioned can still be stolen by fraudsters. Although notraditional financial instrument is used to link a consumer to his/herfinancial account, the above approaches are still susceptible to fraud.

In the present disclosure, a computer network with device interfaces anda central computer system having memory, a database, and peripherals,collectively referred to as a Cardless Financial Transactions System(CFTS) in this disclosure, connects consumers, organizations, merchants,financial institutions, etc. through the device interfaces. The centralcomputer system is used to manage all the consumers, organizations,merchants, financial institutions, accounts, financial activities, etc.on the network in a secured manner.

For illustration purposes, payment transactions are often used asexamples in the present disclosure. However, the present disclosure canbe applied to other types of financial transactions in addition topayment transactions.

In one embodiment of the present disclosure, a person logs into the CFTScomputer through a device interface and opens an account with thecomputer system of the CFTS and provides the CFTS with the person'spersonal information, including personal identification information.

In another embodiment of the present disclosure, the embeddedinformation of an official identification document is read by a deviceinterface to provide the personal identification information. Since theofficial identification document is protected by the respectivegovernment, reading the embedded information directly from the officialidentification document can effectively prevent fraud.

To make sure that the person is the true owner of the officialidentification document, the embedded information of the officialidentification document can be used to authenticate the identity of theperson. For example, if the biometrical information of the person, suchas fingerprint, iris patterns, photo, etc., corresponds to thebiometrical information embedded within or on the officialidentification document, the person must be the true owner of theofficial identification document.

Alternatively, if a person can accurately provide some privateinformation, such as personal identification number, which is embeddedinside the official identification document, this person is very likelythe true owner of the official identification. This authenticationapproach is much more accurate than the traditional approach whichdepends on human comparison between the appearance of the person and thephoto on the official identification document. Furthermore, since thisauthentication approach eliminates the need for human involvement, aconsumer can open an account at a terminal, kiosk, etc.

The CFTS computer processes the personal information submitted by theperson and approves the account opening for the person in compliancewith regulations and laws. Once an account is opened, a person can beidentified by a set of partial personal identification information.

For example, a consumer can be identified by a combination of the zipcode of the address shown on the consumer's identification document, theyear of birth, the last four digits of the ID number, the first twoletters of the first name, the first two letters of the last name shownon the ID, the country/state of issuance of the ID, the expiration dateof the ID, etc. Because only a set of partial data of the consumer'spersonal identification information is used, the true identity of theconsumer is not disclosed. Furthermore, there is no way to recover thepersonal identification information of the consumer from or through thisset of partial data.

Although only a set of partial data of the consumer's personalidentification information is used, the probability of a mismatch whentwo persons having the same set of partial data can be substantiallyreduced to zero if a sufficient amount of partial data is used. In thecurrent example, the probability for a mismatch is in the magnitude ofabout 1 out of 10²². The number 10²² is derived from the approximationof 10⁵ (5 digit zip code)×10² (year of birth based on two digits of a100-year life span)×10⁴ (4 digits of ID number)×26² (2 letters of firstname)×26² (2 letters of last name)×200 (estimated number ofparticipating countries)×365×4 (a 4-year effective period for the ID).

Even if two consumers have the same set of partial data, such confusioncan be easily resolved by other methods. For example, the computersystem of CFTS can assign an additional number with a very short length,such as six digits, to distinguish among the persons who happen to havethe same set of partial personal identification information.

Since there are only about 6 billion persons on earth (i.e., 6×10⁹), thetotal number of persons who may have the same set of partial personalidentification data is a very small number if a sufficient amount ofpartial personal identification data is used. As a result, a number of afew digits will be more than sufficient to identify the entirepopulation on earth when a set of partial personal identification datais also used for identification purposes. In fact, it is possible thateven 2 or 3 digits will be sufficient.

Since only a few digits are assigned by the computer system of the CFTS,a consumer only needs to remember this short number of a few digitsbecause the consumer should know his/her own personal identificationinformation.

For the purpose of this disclosure, this short number is referred to asAccount Identification Number (AIN). As a result, the equivalent accountidentification (which is equivalent to the traditional account number)of the CFTS can be a combination of the AIN and a set of personalidentification data. For example, a possible account identification ofthe CFTS can be composed of the 5-digit zip code of the consumer, thelast 4 digits of the consumer's phone number, and a 6-digit AIN. Ingeneral, a consumer remembers his/her zip code and phone number. As aresult, a consumer only needs to remember his/her short AIN.

In one embodiment of the present disclosure, the AIN is assigned by theCFTS computer. To further reduce the need for consumers to memorizenumbers, in another embodiment of the present disclosure, a consumer cansuggest his/her own preferred AIN and the CFTS computer can approve theparticular AIN if no other person in the CFTS database, whose set ofpartial personal identification data is identical to the consumer's, hasused the suggested AIN yet.

If zip code is not used in a particular country or area, a possibleaccount number of the CFTS can be composed of, for example, the last 5digits of the official identification document number of the consumer,the last 4 digits of the consumer's primary phone number, and a 6-digitAIN assigned by the CFTS computer. In fact, many other different sets ofpartial personal identification information can be used to achieve thesame goal.

Since only partial personal identification information is used, theidentity of the consumer cannot be recovered from a set of partialpersonal identification information and the privacy of the consumer isfully protected.

In an alternative embodiment of the present disclosure, if privacy isnot a concern, the personal phone number of a person and the countrycode and the area code of the person can uniquely identify a person.

In one embodiment of the present disclosure, this short AIN alsocontains one or two control digits to further strengthen the security ofthe account number of CFTS. For example, a control digit can be derivedby taking the last digit from the sum of all other digits of the CFTSaccount identification. Another example is that a control digit isobtained by taking the last digit of the sum of the square of each ofthe other digits of the CFTS account identification.

As a result of these control digits, not all numbers can be used foraccount identification in the CFTS database. These control digits caneffectively reduce the chance that a fraudster can randomly pick anumber and use it as the CFTS account identification.

The above approach of using partial personal identification informationto identify an account can also be used by an automatic checkout stand,an ATM terminal, a kiosk, or other types of device interfaces.

In the event that a consumer cannot remember this short AIN of a fewdigits, in one embodiment of the present disclosure, a consumer can usehis/her identification document to conduct financial transactions. Theinformation on the identification document can be entered by theconsumer, the merchant, or the financial institution. It is preferableto use the “official” identification documents for this purpose becauseofficial identification documents are protected by the respectivegovernment organizations which issued the official identificationdocuments.

In another embodiment of the present invention, a device interface, suchas a terminal, can read the information embedded within or on theidentification document. As a result, a consumer can pay goods orservices with his/her identification document at an automatic checkoutstand.

In one embodiment of the present disclosure, there is no need to sendall the information of the identification document to the CFTS computer.To protect the consumer's personal identification information which canbe stolen during the data transmission, a set of partial data of thepersonal identification information can be used for identificationpurposes. For example, the 5-digit zip code, the last 6 digits of theidentification document number and the initial of the last name can beused for identification purposes. In this example, the chance for amismatch is one out of 2.6 trillion (i.e., 26×10⁵×10⁶).

In another embodiment of the present disclosure, a PersonalIdentification Number (PIN) can be used with dual purposes (1) toeliminate the chance of mismatch and (2) to enhance the security.

In one embodiment of the present disclosure, the PIN can be assigned bythe CFTS computer. In another embodiment of the present disclosure, thePIN can be suggested by the consumer and will become effective after theapproval by the computer of the CFTS.

In yet another embodiment of the present disclosure, a PIN can becomposed of some digits suggested by the consumer and some digitsassigned by the CFTS computer. In an alternative embodiment of thepresent invention, an AIN or a part of the AIN can also be used as thePIN. In yet another alternative embodiment of the present invention, aPIN or a part of the PIN can also be used as the AIN.

If privacy is not a concern, in one embodiment of the presentdisclosure, the entire identification document number can be used foraccount identification purposes to reduce the probability of mismatches.Since there are many different countries, states and governments thatmay issue identification documents, such as driver licenses, passports,etc., an identification document number may not be unique. Under suchcircumstances, a PIN and/or AIN can eliminate such confusion. In anotherembodiment of the present disclosure, the identification documentnumber, the zip code and the PIN and/or AIN can be jointly used to reachthe account identification goal.

The above identification document approach can also be used by anautomatic checkout stand, an ATM terminal, a kiosk, or other types ofdevice interfaces.

Alternatively, in one embodiment of the present disclosure, the CFTScomputer system can send account identification information to apersonal communication device of the consumer. The personalcommunication device of the consumer can send such accountidentification information to the payee's device interface for accountidentification purposes through optical, acoustic, electronic, magnetic,and/or electro-magnetic mediums.

For security purposes, in one embodiment of the present disclosure, aPIN and/or AIN can also be used to protect such transactions. The aboveapproach can also be used by an automatic checkout stand, an ATMterminal, a kiosk, or other types of device interfaces.

In one embodiment of the present disclosure, the consumer uploadshis/her recent photo into the computer system of the CFTS. Because aperson's face is exposed to the public everyday and many online socialnetworks may have already posted the photo of the person on theInternet, the photo of a consumer is generally not considered to be“private information.” This photo can be used to enhance the security ofthe CFTS.

In one embodiment of the present disclosure, in order to open anaccount, a consumer may upload his/her name and tax ID so that the CFTScan verify the existence of the consumer through government records.Because each consumer has one unique tax ID in a country, each consumerhas only one chance to open an account with the computer of the CFTS. Ifa duplicate tax ID is detected, the CFTS can conduct an investigation toidentify which consumer has the correct tax ID and can filter out thefraudster. The tax ID can be encrypted in the database, or encrypted ina separate database, so that nobody can see or use it after the accountopening process.

To comply with anti-money laundering and anti-terrorist financingrequirements, in one embodiment of the present disclosure, the computersystem may screen the consumer against the regulatory lists to ensurethat the CFTS can conduct transactions with the consumer in compliancewith applicable regulations and laws. In another embodiment of thepresent disclosure, the computer system of CFTS can conducttransactional monitoring to detect suspicious activities in compliancewith applicable regulations and laws.

In yet another embodiment of the present disclosure, a consumer mayprovide information about a financial account under the consumer's name.The CFTS can conduct a transaction with the consumer's financial accountand request the consumer to report the amount and/or the type oftransaction. If the consumer cannot report it correctly, the consumermay be a fraudster because he/she cannot tell what is going on inhis/her own financial account. The financial account information can beencrypted so that nobody can see or use it.

To ensure that the personal identification information stored in theCFTS database is up-to-date, in one embodiment of the presentdisclosure, a consumer may update his/her personal identificationinformation in the CFTS database whenever there is a change of theinformation. For example, when a consumer moves to another state,his/her driver's license and address may be changed and the consumer mayupdate the personal identification information stored inside CFTS'sdatabase.

In one embodiment of the present disclosure, the CFTS computer systemcan detect a possible address change if the locations of a consumer'stransactions have been substantially changed to a new area. Upon suchdetection of a possible address change, the computer system can send amessage to the consumer and request the consumer to update his/herpersonal identification information.

In one embodiment of the present disclosure, a consumer may provide oneor more contact phone numbers and/or email addresses for contactpurposes.

In one embodiment of the present disclosure, a consumer may input intothe CFTS database a list of questions and answers which are designed bythe consumer and relate to unique knowledge known only by the consumer.For example, a question may be “What is the name of a person who satnext to me during 1^(st) grade?” The answer to this question will besimilarly unique. Because the questions are designed by the consumer,the chance for a fraudster to know the answers is substantiallynegligible. For the purposes of this disclosure, these questions arereferred to as “challenge questions.”

In another embodiment of the present disclosure, the challenge questionmay be “What is the key code?”, and a consumer is required to input akey code into the device interface of the CFTS computer. For thepurposes of this disclosure, a key code is an alpha-numeric combinationdesigned by the consumer, substantially like a password. The chance foranother person to know or correctly guess the key code is low.

To further strengthen the protection of the consumer, in yet anotherembodiment of the present disclosure, the CFTS may use each key codeonly once during a pre-defined period of time. The consumer may updatethe key code periodically. Alternatively, the consumer can storemultiple key codes at one time to avoid the burden of frequentlyupdating the key codes.

To provide additional protection to the consumer, in one embodiment ofthe present disclosure, a consumer can select his/her own user ID,Personal Identification Number, AIN, password, etc. In anotherembodiment of the present disclosure, a consumer can change his/her userID, Personal Identification Number, AIN, password, etc. from time totime as an extra protection against theft of these data used by theCFTS.

Because each user of the CFTS registers with the computer system of CFTSand uses the CFTS services based on a unique identity, the CFTS canconduct financial transactions for the user. There are many ways totransfer funds electronically between an entity's (e.g., payer's)account in a financial institution and the entity's account in the CFTS.For example, in one embodiment of the present disclosure, an AutomaticClearing House (“ACH”) transaction can complete such an electronic fundtransfer at a very low cost today.

In other embodiments of the present disclosure, debit card networks,credit card networks, ATM or other real time and non-real time networkscan be used to transfer funds electronically between an entity's accountin a financial institution and the entity's account in the CFTS.

As a result, any consumer, organization, merchant or financialinstitution can transfer funds to another consumer, organization,merchant or financial institution through the CFTS. The CFTS can becomea common platform for consumers, businesses and financial institutionsto conduct commercial activities.

After the consumer has opened an account with the computer of the CFTS,if a fraudster tries to use the consumer's stolen identity to conduct afinancial transaction at a bank, in one embodiment of the presentdisclosure, a teller can enter into the computer system of the CFTS asubset of partial personal identification information used by the CFTS.The computer system of the CFTS can search its database to find anddisplay the photo of the consumer.

Alternatively, in another embodiment of the present disclosure, theteller can scan an official identification document of the fraudsterinstead of manually entering the subset of partial personalidentification information into the computer system of CFTS. Thecomputer system of CFTS can search its database to find and display thephoto of the consumer. The teller can deny the fraudster's transactionsif he/she does not correspond to the photo of the consumer.

If the teller cannot distinguish the fraudster based on the photo of theconsumer, in another embodiment of the present disclosure, the tellercan ask a challenge question or request a key code designed by theconsumer. If the person cannot answer the challenge question or give thekey code correctly, this person is possibly a fraudster.

In another embodiment of the present disclosure, the teller can requestthe person to provide an additional piece of partial personalinformation. The computer system of the CFTS can compare the additionalpiece of information of the person with the consumer's informationstored in the CFTS database to determine whether the person is theconsumer.

In yet another embodiment of the present disclosure, authorizedpersonnel of a financial institution can call the consumer's phonenumber, which was provided by the consumer and stored in the CFTSdatabase, to verify whether the consumer is the same person conductingthe transactions at the financial institution. In an alternativeembodiment of the present disclosure, authorized personnel of afinancial institution can send an email to the consumer to verifywhether the consumer has requested the financial institution to conducta particular transaction.

In one embodiment of the present disclosure, the teller can inform theCFTS computer if the teller rejects the transaction and the CFTScomputer can send an alert information message to the consumer so thatthe consumer is alerted of a possible fraud against the consumer.Similarly, if a fraudster tries to use the consumer's identity topurchase goods or services at a merchant after stealing the consumer'sidentity, in other embodiments of the present disclosure, the photo ofthe consumer, the challenge questions, the key codes, and/or theadditional partial information can be used to detect the fraudster.

In another embodiment of the present disclosure, the merchant informsthe CFTS computer if the merchant rejects the transaction and the CFTScomputer can send a message to the consumer so that the consumer may bealerted that there is a possible fraud against the consumer.

If a fraudster tries to use the consumer's identity to purchase goods orservices online, in another embodiment of the present disclosure, thechallenge questions, the key codes and/or the additional partialpersonal information can be used by the online merchants to detect thefraudster.

In yet another embodiment of the present disclosure, if the CFTScomputer rejects the transaction because the answer is wrong, the CFTScomputer can also send a message to the consumer so that the consumer isalerted of a possible fraud against the consumer.

In one embodiment of the present disclosure, the CFTS can alert theconsumer's financial institutions after identifying a possible identitytheft and/or fraud against the consumer so that the financialinstitutions can act to protect the consumer and the financialinstitutions.

In another embodiment of the present disclosure, a computer system canuse the alert provided by the CFTS computer to implement additionalprovisions to protect the consumer, the financial institutions andpossibly other clients of the financial institutions. An additionalsoftware system can be established in the computers of the financialinstitutions for anti-fraud purposes based on the alert provided by theCFTS computer.

As a result, the CFTS also enables consumers, financial institutions andmerchants to jointly detect and prevent fraud in financial transactions.

To further automate the process of financial crime prevention, in oneembodiment of the present disclosure, the transaction networks offinancial institutions, such as the credit card network, debit cardnetwork, trading network, insurance network, etc. can be linked to theCFTS computer so that a consumer's photo, challenge questions, keycodes, and/or additional information can be used by consumers, merchantsor financial institutions when they conduct transactions through thesetransaction networks.

In another embodiment of the present invention, the CFTS can beintegrated into the existing networks for credit cards, debit cards,stored value cards, ATM cards, gift cards, prepaid cards, etc.

To facilitate anti-fraud payment transactions for a consumer, in oneembodiment of the present disclosure, a consumer (e.g., the payer) cangive the merchant (i.e., the payee) the payer's CFTS accountidentification (which consists of AIN and a set of partial personalidentification data), the payer's official identification document, orthe account identification information transmitted from the personalcommunication device through, for example, a bar code, electronicsignal, acoustic, magnetic signal, electro-magnetic signal, etc. Thepayee can then enter the account identification or the officialidentification document number into the device interface provided by theCFTS computer over the network. Alternatively, the officialidentification document number, bar code, acoustic, electronic signal,magnetic signal, or electro-magnetic signal can be read by a deviceinterface the PIN or AIN can also be used as an option.

In addition, the payee or payer can enter a dollar amount the payer issupposed to pay. If there is a sufficient amount of money in the payer'sCFTS account to cover the payment amount, the CFTS computer can freezethe amount of money in the payer's account and issue a new “pass code”which value cannot be predicted before the issuing. In one embodiment ofthe present disclosure, the pass code, the dollar amount, and/or thepayee's name are sent to the payer by a text message, voice mail,instant message, etc. through a mobile phone, Personal Digital Assistant(PDA), or other personal communication devices. In another embodiment ofthe present disclosure, the pass code, the dollar amount, and/or thepayee's name are sent to the payer by email, land line phone, or fax.

After receiving the pass code and confirming the dollar amount and thepayee's name, in one embodiment of the present disclosure, the payer maygive the pass code to payee who can enter the pass code into the deviceinterface of the CFTS computer. If the pass code entered by the payeematches the pass code sent to the payer, the CFTS computer can transferthe frozen amount of money in the payer's account into the payee'saccount and the payment transaction is completed. Alternatively, thepayer can enter the pass code into the payee's device interface for apoint of sale transaction, or enter the pass code into payee's computeruser interface for an online transaction or a transaction at anautomatic checkout stand. In another embodiment of the presentdisclosure, after receiving the pass code, a payer can send a textmessage, instant message, email, fax, voice mail, etc. to the computerof the CFTS to approve a particular transaction based on the particularpass code associated with the transaction.

The financial transactions referred to in the present disclosure are notlimited to payment transactions. The same system and method can be usedfor other types of financial instructions. For example, in anotherembodiment of the present disclosure, a consumer (e.g., a stock trader)can give a stockbroker (i.e., the counter party) the stock trader's CFTSaccount identification, the stock trader's identification document, oran optical, acoustic electronic, electro-magnetic or magnetic signalfrom the trader's personal communication device. The stockbroker canthen input the account identification, the identification documentnumber, or receive an optical, acoustic, electronic, electro-magnetic ormagnetic signal through the device interface of the CFTS computer. Inaddition, the stockbroker can enter the transactional details given bythe stock trader. If the stock trader's account meets the tradingrequirements for this particular transaction, the CFTS computer canfreeze the amount of money involved in the stock trader's account tocover the transaction cost and issue a new “pass code” which valuecannot be predicted before the issuing.

In one embodiment of the present disclosure, the pass code, thetransaction details and/or the stockbroker's name are sent to the stocktrader by a text message, instant message, voice mail, etc. through acellular phone, Personal Digital Assistant (PDA), or other personalcommunication devices. In another embodiment of the present disclosure,the pass code, the transaction details and/or the stockbroker's name aresent to the stock trader by email, land line phone, fax, etc.

After receiving the pass code and confirming the transactional detailsand the stockbroker's name, in one embodiment of the present disclosure,the stock trader may give the pass code to the stockbroker who can enterthe pass code into the device interface of the CFTS computer. If thepass code entered by the stockbroker matches the pass code sent to thestock trader, the CFTS computer can complete the transaction based onthe instructions given by the stock trader.

Alternatively, the stock trader can enter the pass code intostockbroker's device interface for a point of sale transaction, or enterthe pass code into stockbroker's user interface for an onlinetransaction. In another embodiment of the present disclosure, afterreceiving the pass code, a stock trader can send a text message, instantmessage, email, fax, voice mail, etc. to the computer of CFTS to approvea particular transaction based on the particular pass code associatedwith the transaction. In addition to stock trading transactions, otherfinancial transactions can be conducted in a similar manner through theCFTS computer.

In one embodiment of the present disclosure, the CFTS computer canchange the consumer's (or payer's) AIN or PIN at the request of theconsumer (or payer).

In another embodiment of the present disclosure, the pass code is givena fixed amount of life time. If the correct pass code is not enteredinto the device interface of the CFTS computer within that fixed amountof time, the pass code can expire, the transaction can be automaticallycanceled and the frozen amount of money in the consumer's account can bereleased back to the consumer.

To further protect the consumer, in one embodiment of the presentdisclosure, if a pre-defined number of wrong pass codes have beenentered against a consumer's account, the consumer's account can befrozen because somebody may be trying to commit fraud against theconsumer through trial-and-error. The frozen account can be reset (i.e.,unfrozen) to normal condition by the consumer. The consumer can alsorequest the CFTS computer to change its account identification or AINbefore resetting the account status back to normal condition.

In one embodiment of the present disclosure, if the dollar amount of asingle transaction has exceeded a threshold set by the consumer, theconsumer's account can be frozen until the consumer resets the accountback to normal condition. In another embodiment of the presentdisclosure, if the aggregate amount of transactions of a consumer'saccount during a pre-defined period of time has exceeded a threshold setby the consumer, the consumer's account can be frozen. This frozenaccount can be reset to normal condition by the consumer. In yet anotherembodiment of the present disclosure, if the total number oftransactions in a consumer's account during a pre-defined period of timehas exceeded the threshold set by the consumer, the consumer's accountcan be frozen. The consumer can reset or unfreeze the account.

The consumer can log into the CFTS computer to reset the consumer'saccount. Alternatively, the counter party (or payee) or consumer canenter an authorization code which is only known to the consumer to resetthe account.

Since the pass code is newly generated by the computer of CFTS in eachtransaction, the counter party of the transaction cannot steal moneyfrom the consumer because the counter party does not know what the passcode is in each transaction until the consumer has confirmed the dollaramount and provided the pass code to the counter party. Since the passcode is sent only to the consumer, a third party is prevented fromstealing money from the consumer because the third party does notreceive the pass code to complete the transaction. Consequently, even ifthe counter party or a third party has stolen the CFTS accountidentification, the identification document or the optical, acoustic,electronic, electro-magnetic, or magnetic signal of the consumer, thecounter party or the third party cannot commit fraud against theconsumer.

Because the amount of payment is verified and frozen in the consumer'saccount first before the pass code is generated and sent to theconsumer, the consumer cannot default on the payment.

Consequently, the CFTS is useful for all kind of financial transactions,including point-of-sale transactions when two parties meet face-to-face,online transactions and remote transactions when the counter parties (orpayees) cannot verify who the consumers (or payers) are.

In one embodiment of the present disclosure, when a payer places anorder on the Internet, the payer can enter the payer's CFTS accountidentification, which consists of the AIN and a set of partial personalidentification data, into the user interface of the Internet merchant.This CFTS account identification is resent by the Internet merchant tothe CFTS computer which can send a pass code to the payer. Then, thepayer can enter the pass code into the user interface of the Internetmerchant. This pass code is resent by the Internet merchant to the CFTScomputer to transfer the payment from the payer's CFTS account to thepayee's CFTS account and the transaction is completed.

In an alternative embodiment of the present disclosure, after receivingthe pass code, a payer can send a text message, instant message, email,fax, voice mail, etc. to the computer of CFTS to approve a particulartransaction based on the particular pass code associated with thetransaction. As a result, the payer can securely complete the onlinetransaction without releasing any personal identification information,suppressing the possibility of fraud, and protecting both the payer andthe payee.

In another embodiment of the present disclosure, a payer can order goodsor services remotely through a phone call by giving the payee thepayer's CFTS account identification. After the payee enters the payer'sCFTS account identification into a device interface of the CFTS, theCFTS computer sends a pass code to the payer. The payer provides thepayee with the pass code to complete the transaction. As a result of thepresent disclosure, the payee can complete the transaction without theneed to know the payer's identity and both parties are fully protectedin the transaction.

In another embodiment of the present disclosure, a payer can completethe payment transaction by himself at an automatic checkout stand. Thepayer can enter his CFTS account identification into the checkout stand,which can resend the payer's CFTS account identification to the CFTScomputer. Alternatively, the payer's official identification document orthe optical, acoustic, electronic, electro-magnetic or magnetic signaltransmitted by the payer's personal communication device can be read bythe checkout stand. The PIN can also be used as an option. The CFTScomputer can send the pass code to the payer, for example, by textmessage, instant message, voice mail, email, etc. to the payer's PDA,mobile phone, etc. Then, the payer can enter into the checkout stand thepass code. The pass code will be sent to the CFTS computer to transferthe payment from the payer's account to the payee's account and thetransaction is completed.

In an alternative embodiment of the present disclosure, after receivingthe pass code, the payer can send a text message, instant message, voicemail, email, fax, etc. to the CFTS computer to approve a particulartransaction based on the particular pass code associated with thattransaction. Both payer and payee are fully protected against fraud inthis transaction and the payer's identity is not disclosed.

Similarly, the CFTS account identification, the consumer's personalidentification document and/or the optical, acoustic, electronic,electro-magnetic or magnetic signal transmitted by the payer's personalcommunication device can be used at an ATM, kiosk, or other types ofdevice interfaces. A new pass code will be sent to the consumer'spersonal communication device after the consumer's CFTS account has beenidentified through the CFTS account identification, the consumer'spersonal identification document and/or the optical, electronic,acoustic, electro-magnetic or magnetic signal transmitted by the payer'spersonal communication device. The consumer can enter the pass code intothe ATM, kiosk, or the other types of device interface. If the pass codeis correct, the consumer can proceed to conduct financial transactionsthrough the ATM, kiosk or the other types of device interfaces.

The present disclosure can also be used to protect the CFTS account userID, password and/or PIN against theft. Traditionally, a security tokendevice is used to protect login security. Such an approach is generallyexpensive because hashing, synchronization, digital signature,cryptography and/or other complicated technology are required to producea token. In addition, the token device itself costs money. Furthermore,a fraudster can still steal the token device from a user.

In one embodiment of the present disclosure, after a user (e.g., aconsumer, merchant, or financial institution) has correctly entered theuser ID, password and/or PIN when the user tries to login from a sourceapplication, a new pass code is generated by the system. Since nohashing, synchronization, digital signature, cryptography or othercomplicated technology is required to generate a pass code, the CFTScomputer system can easily produce such a pass code at very low cost.

This pass code is immediately sent to a destination other than thesource application from which the user is attempting login. For example,the destination can be an email address, phone number, etc. based on thecontact information of the officially registered user stored inside thesystem. The user has to enter the correct pass code into the system tocomplete the login process before the pass code expires. As a result,even if a fraudster has stolen the user ID, password and/or PIN, thefraudster cannot log into the system without having the important passcode. Because the pass code is different in each login, a third party isunable to steal such a pass code.

There is no need to purchase any token device which can become veryexpensive. The login process of the present disclosure can be quicklyimplemented as long as the user has some communication device, such as amobile phone which is very popular today.

Therefore, the present disclosure provides an enhanced protection tocomputer-based systems against financial transactions fraud.

The system of the present disclosure can potentially replace all thetraditional payment instruments and, at the same time, provide improvedprotection for consumers, organizations, merchants and financialinstitutions. Furthermore, there is no need for consumers to carry thetraditional financial instruments such as cash, check, credit card,debit card, prepaid card, gift card, stored-value card, ATM card,monetary instruments, etc.

Moreover, the present disclosure can quickly and securely transfer moneyto any place with access to the CFTS. The CFTS becomes a GlobalRemittance Network.

As an additional convenience to the consumer, in one embodiment of thepresent disclosure, a consumer can go shopping without carrying thetraditional financial instruments such as cash, credit card, debit card,prepaid card, stored-value card, gift card, check, monetary instrument,etc. For example, the merchant can enter the dollar amount and theconsumer's CFTS account identification into the device interface of theCFTS. The consumer can obtain the pass code from his/her personalcommunication device and give it to the merchant to complete thetransaction. This option is very useful to protect young children whoseparents do not feel comfortable letting children carry cash or pre-paidcards for safety reasons.

In fact, a consumer can easily conduct any payment as long as he/shecarries a personal communication device such as mobile phone,smartphone, smartbook, PDA, etc. As a result, in the event that aconsumer forgets his/her wallet containing financial instruments (e.g.,cash, credit/debit/gift cards, etc.), he/she could still pay themerchant through his/her CFTS account. If the consumer also forgets tocarry the cellular phone, PDA, etc., he/she can still use the merchant'scomputer to log into the CFTS to directly transfer funds from theconsumer's CFTS account to the merchant's CFTS account.

In summary, many different embodiments and combinations of embodimentsare disclosed in the present invention to protect a financialtransaction against fraud. A particular embodiment or a particularcombination of embodiments can be applied for a financial transactionbased on the risk involved in the financial transaction. Alternatively,the choice of a particular embodiment or a particular combination ofembodiments can be made based on commercial reasons.

As contemplated in the described embodiments, one of many possiblecombinations is described below as an example. The computer system ofthe Cardless Financial Transactions Network (“CFTS”) 500 and a network,such as the Internet 600 enable a consumer 100, a financial institution200, a retail store 300 and an online merchant 400 to conduct securedfinancial transactions as shown in FIG. 1.

Reference should now be made to the flowchart of FIG. 2 in combinationwith the system diagram of FIG. 1, which together illustrate how aconsumer can open an account with the computer system of CFTS 500.

First (block 2001), a device interface reads the embedded informationfrom consumer's official identification document. The device interfaceauthenticates the identity of the consumer 100 by comparing the embeddedidentification information with the information provided by the consumer100 (block 2002). For example, if the fingerprint of the consumers 100matches the biometric information embedded within the officialidentification document, the consumer 100 must be the owner of theofficial identification document.

According to the authentication result, the device interface may take adifferent action (decision block 2003). If the consumer's identity isnot correct (No branch 2004), i.e., the identity of the consumer 100cannot be authenticated, the device interface rejects the consumer 100from opening an account (block 2010).

If the consumer's identity is correct (YES branch 2005), i.e., theconsumer 100 is the owner of the official identification document, theCFTS computer 500 will determine whether the consumer 100 is on theblacklist used by the CFTS computer 500 (decision block 2006). Thisblacklist includes the information provided by government agencies(e.g., Office of Foreign Assets Control) and commercial organizations.

If the consumer 100 is on the blacklist (YES branch 2007), the consumeris rejected from opening an account (block 2010). If the consumer 100 isnot on the black list (NO branch 2008), the consumer is permitted toproceed to complete the process and open an account with the CFTScomputer 500 (block 2009).

After the consumer 100 has opened an account with the CFTS computer 500,the consumer 100 can conduct secured financial transactions with aretail store 300 at point of sale or with a remote merchant 400 viaphone call. The flowchart in FIGS. 3A and 3B in combination with thesystem diagram of FIG. 1 illustrate how these kinds of transactions canbe conducted.

The consumer 100 provides the retail store 300 or the remote merchant400 with a set of partial personal identification data, e.g., the last 4digits of the driver's license number and the 5-digit zip code. Inaddition, the consumer 100 provides the retail store 300 or the merchant400 with his/her CFTS account identification number (AIN). The retailstore 300 or the merchant 400 enters the partial personal identificationand AIN of the consumer 100 into a device interface of the CFTS (block3001).

The set of partial personal identification data and the AIN of theconsumer 100 are sent to the CFTS computer 500 via network 600. The CFTScomputer 500 uses the received information to identify the account ofthe consumer 100 (block 3002).

The CFTS computer 500 determines whether there is a sufficient amount ofmoney in the consumer's account for the transaction (decision block3003). If there is not a sufficient amount of money (NO branch 3004),the CFTS computer 500 rejects the transaction (block 3012). If there isa sufficient amount of money (YES branch 3005), the CFTS computer 500freezes the amount for the transaction and sends a new pass code to theconsumer 100 (block 3006).

The consumer 100 gives the pass code to the retail store 300 or themerchant 400, which enters the pass code into the device interface ofthe CFTS (block 3007). The CFTS computer 500 determines whether thereceived pass code is the same pass code sent to the consumer 100(decision block 3008).

If the pass code is incorrect (NO branch 3009), the CFTS computer 500rejects the transaction (block 3012). If the pass code is correct (YESbranch 3010), i.e., the same pass code is received, the CFTS computer500 completes the transaction for the consumer 100 (block 3011).

Sometimes, retail store 300 may permit consumer 100 to interact directlywith the device interface in the retail store 300. In addition, anautomatic checkout stand may expect the consumer 100 to interfacedirectly with the checkout stand. Furthermore, for online commercialactivities, a consumer 100 may interact directly with the user interfaceprovided by the online merchant 400 via the network 600. Under suchcircumstances, the flowchart in FIGS. 4A and 4B in combination with thesystem diagram of FIG. 1 illustrate how these transactions can beconducted on the CFTS.

The consumer 100 enters a set of partial personal identification data,e.g., the last 4 digits of the driver's license number and the 5-digitzip code, and AIN into a device interface which sends the entered datato the CFTS computer 500 via network 600 (block 4001). The CFTS computer500 uses the received information to identify the account of theconsumer 100 (block 4002).

The CFTS computer 500 determines whether there is a sufficient amount ofmoney in the consumer's account for the transaction (decision block4003). If there is not a sufficient amount of money (NO branch 4004),the CFTS computer 500 rejects the transaction (block 4012). If there isa sufficient amount of money (YES branch 4005), the CFTS computer 500freezes the amount for the transaction and sends a new pass code to theconsumer 100 (block 4006). The consumer 100 enters the pass code intothe device interface which sends the pass code to the CFTS computer 500(block 4007). The CFTS computer 500 determines whether the received passcode is the same pass code sent to the consumer 100 (decision block4008). If the pass code is incorrect (NO branch 4009), the CFTS computer500 rejects the transaction (block 4012). If the pass code is correct(YES branch 4010), i.e., the same pass code is received, the CFTScomputer 500 completes the transaction for the consumer 100 (block4011).

Alternatively, a consumer 100 can use the bar code sent by the CFTScomputer 500 to his/her personal communication device to complete asecured financial transaction. The flowchart in FIGS. 5A and 5B incombination with the system diagram of FIG. 1 illustrate how this kindof transaction is conducted on CFTS.

A device interface at the retail store 300 reads the bar code from thepersonal communication device of the consumer 100 (block 5001) and sendsthe bar code data to the CFTS computer 500 via network 600. The CFTScomputer 500 uses the bar code to identify consumer's account (block5002).

The consumer enters his/her personal identification number (PIN) intothe device interface which sends the PIN to the CFTS computer 500 vianetwork 600 (block 5003).

The CFTS computer determines whether the PIN entered by the consumer 100is correct or not (block 5004). If the PIN is incorrect (NO branch5005), the CFTS computer 500 rejects the transaction (block 5016). Ifthe PIN is correct (YES branch 5006), the CFTS computer 500 determineswhether there is a sufficient amount of money in the consumer's accountfor the transaction (decision block 5007). If there is not a sufficientamount of money (NO branch 5008), the CFTS computer 500 rejects thetransaction (block 5016). If there is a sufficient amount of money (YESbranch 5009), the CFTS computer 500 freezes the amount for thetransaction and sends a new pass code to the consumer 100 (block 5010).

The consumer 100 enters the pass code into the device interface whichsends the pass code to the CFTS computer 500 (block 5011).

The CFTS computer 500 determines whether the received pass code is thesame pass code sent to the consumer 100 (decision block 5012). If thepass code is incorrect (NO branch 5013), the CFTS computer 500 rejectsthe transaction (block 5016). If the pass code is correct (YES branch5014), i.e., the same pass code is received, the CFTS computer 500completes the transaction for the consumer 100 (block 5015).

The system and method of the present disclosure can also enhance thelogin security of a computer system. The flowchart in FIG. 6 illustrateshow a fraudster cannot log into a computer system even with a correctUser ID and Password.

A subject enters a correct User ID and Password in order to log into acomputer system (block 6001). Based on the correct User ID and Password,the computer system sends a new pass code to the registered user (block6002). The subject is prompted to enter the pass code into the computersystem (block 6003).

The computer system determines whether the pass code entered by thesubject matches the pass code sent to the registered user (decisionblock 6004). If the pass code is incorrect (NO branch 6005), thecomputer system rejects the login by the subject (block 6008). If thepass code is correct (YES branch 6006), the computer system permits thesubject to log into the computer system (block 6007).

The system and method of the present disclosure can also be used toconduct financial transactions through a personal identificationdocument. The flowchart in FIGS. 7A and 7B in combination with thesystem diagram of FIG. 1 illustrate how financial transactions can becompleted this way.

A device interface reads the embedded data from a personalidentification document of the consumer 100 and sends the embedded datato the CFTS computer 500 (block 7001).

The CFTS computer 500 uses the data received from the device interfaceto identify the account of the consumer 100 (block 7002).

The CFTS computer 500 determines whether the consumer's account permitsthe requested transaction (decision block 7003). For example, if theconsumer's account is a credit account, the account permits therequested transaction when the account has available credit for thetransaction. If the consumer's account is a prepaid account, the accountpermits the requested transaction when the account has sufficient moneyfor the transaction. If the account does not permit such a transaction(NO branch 7004), the CFTS computer 500 rejects the transaction (block7012). If the account permits such a transaction (YES branch 7005), theCFTS computer 500 freezes the amount for the transaction and sends a newpass code to the consumer 100 (block 7006).

The consumer 100 gives the pass code to the merchant. The merchantenters the pass code into the device interface which sends the pass codeto the CFTS computer 500 (block 7007).

The CFTS computer 500 determines whether the received pass code is thesame pass code sent to the consumer 100 (decision block 7008). If thepass code is incorrect (NO branch 7009), the CFTS computer 500 rejectsthe transaction (block 7012). If the pass code is correct (YES branch7010), i.e., the same pass code is received, the CFTS computer 500completes the transaction for the consumer 100 (block 7011).

The methodologies described herein may be implemented by various meansdepending upon the application. For example, these methodologies may beimplemented in hardware, firmware, software, or any combination thereof.For a hardware implementation, the processing may be implemented withinone or more application specific integrated circuits (ASICs), digitalsignal processors (DSPs), digital signal processing devices (DSPDs),programmable logic devices (PLDs), field programmable gate arrays(FPGAs), processors, controllers, micro-controllers, microprocessors,electronic devices, other electronic units designed to perform thefunctions described herein, or a combination thereof.

For a firmware and/or software implementation, the methodologies may beimplemented with modules (e.g., procedures, functions, and so on) thatperform the functions described herein. Any machine-readable mediumtangibly embodying instructions may be used in implementing themethodologies described herein. For example, software codes may bestored in a memory and executed by a processor. Memory may beimplemented within the processor or external to the processor. As usedherein the term “memory” refers to any type of long term, short term,volatile, nonvolatile, or other memory and is not to be limited to anyparticular type of memory or number of memories, or type of media uponwhich memory is stored.

If implemented in firmware and/or software, the functions may be storedas one or more instructions or code on a computer-readable medium.Examples include computer-readable media encoded with a data structureand computer-readable media encoded with a computer program.Computer-readable media includes physical computer storage media. Astorage medium may be any available medium that can be accessed by acomputer. By way of example, and not limitation, such computer-readablemedia can comprise RAM, ROM, EEPROM, CD-ROM, DVD, or other optical diskstorage, magnetic disk storage or other magnetic storage devices, or anyother medium that can be used to store desired program code in the formof instructions or data structures and that can be accessed by acomputer; disk and disc, as used herein, includes compact disc (CD),laser disc, optical disc, digital versatile disc (DVD), floppy disk andblue-ray disc where disks usually reproduce data magnetically, whilediscs reproduce data optically with lasers. Combinations of the aboveshould also be included within the scope of computer-readable media.

In addition to storage on computer readable medium, instructions and/ordata may be provided as signals on transmission media included in acommunication apparatus. For example, a communication apparatus mayinclude a transceiver having signals indicative of instructions anddata. The instructions and data are configured to cause one or moreprocessors to implement the functions outlined in the claims. Thecommunication apparatus may not store all of the instructions and/ordata on a computer readable medium.

The embodiments described in this disclosure can be assembled to form avariety of applications based on the need. Those skilled in the art andtechnology to which this disclosure pertains can appreciate thatalterations and changes in the described structure may be practicedwithout meaningfully departing from the principal, spirit and scope ofthis disclosure. Such alterations and changes should not be construed asdeviations from the present disclosure.

What is claimed is:
 1. A computer system to conduct financialtransactions without using traditional financial instruments whilekeeping a user's identity confidential in the financial transactions,comprising: a computer processor and a memory device; a database storedon the memory device adapted to store associated with a user's accountat least a user's partial personal identification information andcontact information of a personal communication device of the user, theuser's partial personal identification information being selected fromthe user's personal identification data to avoid disclosing an identityof the user; a communication device operable by the processor to send anew pass code in substantially real-time to the user's personalcommunication device in response to receiving the user's partialpersonal identification information from a subject and the user'saccount complying with a pre-defined condition, the new pass code havinga pre-defined life time; and a transaction processing module operable bythe processor to approve a financial transaction with the user's accountand to permit the subject to conduct the financial transaction inresponse to receiving the new pass code from the subject before the newpass code expires.
 2. The computer system of claim 1 in which theprocessor generates instructions to freeze the user's account when anincorrect pass code has been received from the subject.
 3. The computersystem of claim 1 in which the communication device is further operableby the processor to send a photo of the user to the subject in responseto receiving the user's partial personal identification information fromthe subject.
 4. The computer system of claim 1 in which the user'spartial personal identification information comprises at least a partialphone number associated with the user.
 5. The computer system of claim 1in which the user's partial personal identification informationcomprises a partial phone number and a short code associated with theuser.
 6. The computer system of claim 1 in which the user's partialpersonal identification information comprises a set of data read from anofficial government issued identification document.
 7. The computersystem of claim 1 in which the user's partial personal identificationinformation comprises a set of data read from an official governmentissued identification document and a short code associated with theuser.
 8. The computer system of claim 1 in which the pre-definedcondition comprises sufficient funds availability in the user's account.9. The computer system of claim 1 in which the pre-defined conditioncomprises sufficient credit availability in the user's account.
 10. Thecomputer system of claim 1 in which the pre-defined condition comprisesqualification of the user's account.
 11. A computerized method toconduct financial transactions without using traditional financialinstruments while keeping a user's identity confidential in thefinancial transactions, comprising: storing associated with a user'saccount at least a user's partial personal identification informationand contact information of a personal communication device of the user,the user's partial personal identification information being selectedfrom the user's personal identification data to avoid disclosing anidentity of the user and being stored on a computer system; sending, bythe computer system, a new pass code in substantially real-time to theuser's personal communication device in response to receiving the user'spartial personal identification information from a subject and theuser's account complying with a pre-defined condition, the new pass codehaving a pre-defined life time; and approving a financial transactionwith the user's account and permitting the subject to conduct thetransaction in response to receiving the new pass code from the subjectbefore the new pass code expires.
 12. The computerized method of claim11, further comprising: freezing the user's account when an incorrectpass code has been received from the subject.
 13. The computerizedmethod of claim 11, further comprising: sending a photo of the user tothe subject in response to receiving the user's partial personalidentification information from the subject.
 14. The computerized methodof claim 11 in which the user's partial personal identificationinformation comprises a phone number associated with the user.
 15. Thecomputerized method of claim 11 in which the user's partial personalidentification information comprises at least a partial phone number anda short code associated with the user.
 16. The computerized method ofclaim 11 in which the user's partial personal identification informationcomprises a set of data read from an official government issuedidentification document.
 17. The computerized method of claim 11 inwhich the user's partial personal identification information comprises aset of data read from an official government issued identificationdocument and a short code associated with the user.
 18. The computerizedsystem of claim 11 in which the pre-defined condition comprisessufficient funds availability in the user's account.
 19. Thecomputerized method of claim 11 in which the pre-defined conditioncomprises sufficient credit availability in the user's account.
 20. Thecomputerized method of claim 11 in which the pre-defined conditioncomprises qualification of the user's account.